June 2024
Executive Summary
The 118th Congress saw limited legislative productivity in 2024, with delayed budget agreements and reliance on continuing resolutions to avoid government shutdowns. Despite this, significant activity occurred in the regulatory space, particularly around environmental and labor policies impacting the trucking industry.
Ongoing conflicts between the Administration, Congress, and industry stakeholders centered on stringent emissions rules and labor regulations, many of which face legal and legislative challenges. At the same time, efforts to advance tax incentives and workforce policies remain uncertain amid political divisions.
Looking ahead, budget negotiations, regulatory outcomes, and the 2024 election cycle will shape future policy direction, with continued implications for transportation, infrastructure, and supply chain operations.
118th Congress’ Productivity Dips, but Regulatory Space Stays Active
The final year of the 118th Congress has looked much like last year, with its share of intraparty squabbling and backbiting. Speaker of the House Mike Johnson (R-LA), who became the new speaker last October, has managed to avoid the parliamentary maneuvers that toppled his predecessor despite his right flank threatening his removal.
Still, despite major deals on foreign aid and the federal budget, the pace of most lawmaking has slowed to a crawl, making it likely that this Congress will be one of the least productive in history.
The NMFTA, however, has been closely engaged on several issues affecting the trucking industry, especially in the regulatory arena, where new environmental and labor rules directly impact our industry.
Congress Finally Reaches Deal on Spending, Averts Numerous Shutdowns
Congress opened the year with unfinished business from 2023: the adoption of a federal budget for Fiscal Year (FY) 2024.
Under regular order, Congress is supposed to pass into law a budget by October 1, the start of the federal fiscal year, but the ideological differences between the Democratic-controlled Senate and the Republican-controlled House made reaching an agreement by the October deadline impossible—a task made even more difficult by the razor-thin margins in each chamber.
So, Congress and the White House instead adopted a series of continuing resolutions (CR), which prevented a government shutdown due to a lapse in appropriations by maintaining spending at current levels while negotiations across Capitol Hill continued.
However, there were plenty of shutdown near-misses with Congress unable to reach a budget deal until March, more than five months into the fiscal year.
Budget Bill Includes Provision to Attract Young Drivers
Funding for the U.S. Department of Transportation (DOT) was part of a $460 billion multiagency package. Two weeks later, another trillion-dollar-plus multiagency budget bill passed to round out the full federal budget and ensure all agencies are funded at least until the conclusion of the fiscal year on September 30.
In addition to establishing spending levels, the U.S. DOT section of the budget bill included critical trucking policy riders, such as language that blocked funding for a Federal Motor Carrier Safety Administration (FMCSA) requirement for companies to install in-cab cameras and to join a Labor Department Registered Apprenticeship program if they want to participate in the Safe Driver Apprenticeship Program (SDAP) for younger drivers.
The young driver apprenticeship program, included in the 2021 bipartisan infrastructure law, is designed to train drivers between ages 18 and 20 to drive across state lines.
Fiscal Year 2025 Spending Plans Already Behind Schedule
NMFTA has now turned its attention to the FY 2025 budget process, but agency officials and congressional appropriators face a tight turnaround.
Since the FY 2024 budgeting process did not wrap up until well into calendar year 2024, the process to craft a new spending plan for 2025 now faces a compressed timeline.
Federal departments and agencies like the U.S. DOT must present their budget requests to the relevant subcommittees in the House and Senate. The committees must pass individual appropriations bills. Then the full House and Senate must pass the same versions of those spending bills before sending them on to the president.
It’s an already daunting task made even more difficult due to the limited time and the pressures that come with an election year.
A more realistic outcome is likely to be that Congress will once again pass a series of short-term CR to avert a shutdown and then complete an FY 2025 deal after the November election.
The appropriations process offers the opportunity to advance policies important to the trucking industry. NMFTA is working with the relevant appropriators to ensure our interests are properly reflected as the budget debate continues throughout the Summer and Fall.
Administration, Capitol Hill, and Trucking Industry Square-Off Over Environmental Rules
The first half of the year has also seen a tug-of-war between the Biden administration’s aggressive environmental regulatory agenda and its opponents from both parties on Capitol Hill.
Federal Highways rule on states’ Phase 3 Greenhouse Gas (GHG3) emissions goals: Finalized last Fall and first implemented in January, the rule by the Federal Highway Administration (FHWA) seeks to force state departments of transportation and metropolitan planning organizations to measure GHG emissions on the highway system and set declining targets.
The trucking industry, however, argues that the GHG rule falls outside congressional intent, was not included in the bipartisan infrastructure law, and undermines the intention of the law.
Two federal courts agreed. Challenged by more than a dozen states, the rule is on pause following decisions in the Northern District of Texas and Western District of Kentucky finding that the federal government went beyond its authority in establishing the rule.
On Capitol Hill, a resolution to roll back the rule and allow state departments of transportation and metropolitan planning organizations to continue investing in their area’s priority infrastructure projects has already cleared the Senate.
Introduced by Democrat Joe Manchin (D-WV) and Republican Senators Kevin Kramer (R-ND) and Shelley Moore Capito (R-WV), the resolution passed the Senate 53-47 in April. A companion measure by Reps. Rick Crawford (R-AR) and Sam Graves (R-MO) has been introduced in the House.
Heavy-Duty Vehicle Emissions: The White House has also proposed new greenhouse gas emissions rules for heavy-duty vehicles beginning in model years 2028-2032. Known as the Phase 3 GHG rules, or GHG3, the new stringent standards are part of a collective Environmental Protection Agency (EPA) Clean Trucks Plan that also includes separate rulemakings for light—and medium-duty vehicles.
The GHG3 rule is unattainable due to very real technological limits in the zero-emission space, including charger availability and power grid resilience.
NMFTA has communicated and will continue to communicate to Capitol Hill support for realistic strategies to reduce carbon emissions, but EPA’s top-down mandates represent a failure to recognize the constraints of technology, costs, and the risk of strain to the supply chain.
Just like the FWHA GHG proposals, resolutions were quickly introduced in the House and Senate to repeal the GHG3 rules.
Sen. Pete Ricketts (R-NE) and Sen. Dan Sullivan (R-AK) introduced the measure in the Senate, and Rep. John James (R-MI) and Rep. Russ Fulcher (R-ID) introduced it in the House.
While the resolutions are a helpful signal to the administration about the legislative branch’s skepticism over the White House agenda, they are sure to be vetoed. However, other avenues exist to block their implementation, including through the appropriations process and the courts, where more than two dozen Republican state attorneys general have already sued the administration over GHG3.
The price of electrification: The rules are part of a concerted effort from the administration to dramatically increase the number of electric vehicles on roads and highways in the next decade.
But as lawmakers analyze the administration’s strategy, they’re learning that reaching that goal will come with a steep price tag.
According to a study from the Clean Freight Coalition (CFC), it would require nearly $1 trillion in infrastructure investment alone to achieve full electrification of the U.S. truck fleet. The study forecasts a realistic infrastructure buildout for the electrification of medium and heavy-duty commercial vehicles, exposing what the CFC calls a massive investment gap as state and federal policymakers mandate increased adoption rates of battery-electric commercial vehicles.
The study found that preparing today’s commercial vehicle fleet for electrification would require the commercial vehicle industry to invest upwards of $620 billion in charging infrastructure alone, including chargers, site infrastructure, and electric service upgrades.
Tax Bill Quickly Clears House, but Stalls in Senate
Rather than stiff mandates, NMFTA and the trucking industry believe a more effective way to incentivize the purchase of less carbon-intensive trucks is via the tax code, through reforms like the repeal of the 12% federal excise tax on heavy-duty trucks and by expensing policies that encourage the purchase of new machinery and equipment.
The year began with optimism that a major tax package could pass through Congress and even become law before tax-filing season, but it quickly became clear that achieving such a goal would face significant headwinds.
In January, the House passed the Tax Relief for American Families and Workers Act of 2024 with a bipartisan 357-70 vote. The bill was negotiated by Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Jason Smith (R-MO), and included:
- R&D expensing for activities that include new oil and gas exploration technologies;
- Extended interest deductibility;
- 100 percent immediate expensing for equipment and machinery;
- Restoration and enhancement of the child tax credit; and
- Enhanced low-income housing tax credit .
The extension of 100% expensing for new equipment would positively affect the trucking industry by promoting investment in newer trucks, which would help increase freight capacity and reduce emissions.
The bill sputtered once it reached the Senate, however, where the chairman of the Senate Finance Committee, Sen. Mike Crapo (R-ID), said the bill was negotiated without his input and that he believes the child tax credit provisions are too generous. He and many of his Republican colleagues believe they’re likely to control the Senate next year and would prefer to wait until then to see if they can negotiate a more favorable bill.
Labor Pains: Acting Secretary Pursues Agenda that Would Harm Trucking Industry
In the first half of 2024, NMFTA continued to oppose several labor regulations that make it more difficult to recruit and retain the talent the industry needs to thrive.
President Biden renominated Julie Su to be secretary of the Department of Labor (DOL) after her nomination in 2023 fizzled following her failure to receive a Senate confirmation vote due to opposition from members of the president’s party. Su has served as secretary in an acting capacity since March of 2023.
Independent Contractors: Su’s re-nomination is especially concerning due to her support for policies that would negatively affect the trucking industry, especially her support for rules to make it more difficult for companies to classify some workers—like truck drivers—as independent contractors, even if the workers prefer the freedom and flexibility that come with being independent contractors.
The federal rule, which took effect in March, is modeled after a similar regulation in California, which Su strongly backed when she served as that state’s labor secretary.
Like similar administration regulatory provisions affecting the trucking industry this year, the rule’s fate is uncertain as it faces legal challenges. Funding for the rule’s implementation could also be stripped in a future appropriations bill.
Joint Employer: The trucking industry has also opposed an administration rule that stands to weaken the franchise business model and the right to contract.
A new National Labor Relations Board (NLRB) rule states that two entities are considered joint employers if they share or co-determine an employee’s essential terms and conditions of employment, such as pay, benefits, scheduling, hiring, discharge, and discipline, even if that control is indirect or unexercised.
The rule makes it more difficult for trucking companies to work with contracted entities, and companies will be reluctant to assume the new level of responsibility for workers with whom they have little direct interaction or control.
Both the House and Senate have passed resolutions opposing the rule, and a federal lawsuit brought by several business groups has blocked its implementation so far. The NLRB could appeal the ruling or propose a modified rule in an attempt to pass legal muster.
NMFTA strongly advocates against expanding any regulations that would harm the trucking industry workforce. NMFTA will remain supportive of truckers who prefer to classify themselves as independent contractors and for the protection of private contracts and the franchise business model.
On the Campaign Trail
Party primaries will continue throughout the Summer as Democrats and Republicans choose their nominees to advance to the November general election.
House Republicans are aiming to increase their majority, while in the Senate, the Grand Old Party (GOP) has a more favorable electoral map and is bullish on its ability to reclaim control of the chamber with opportunities to pick up seats in Montana, Ohio, and West Virginia.
Republican Party leaders are chastened, however, by their underperformance in the 2022 cycle and subsequent special elections. Democrats, meanwhile, are hopeful their fundraising edge will help them maintain the White House and stave off challenges to their congressional incumbents.
No matter which party controls Capitol Hill in 2025, the margins will again be tight.
